Volkswagen making progress with unions over turnaround plan

February 22, 2017

Volkswagen (VW) union representatives and senior executives have both said they are making progress in discussions to solve the conflict over the implementation of the embattled company's post-Dieselgate turnaround plan.

Volkswagen’s massive restructuring plan aims to save €3.7 billion annually by 2020 as it seeks to launch 30 electric vehicles by 2025 and transition into a fully-fledged mobility company. It also faces billions of dollars in settlement costs accrued from the emissions scandal. Around 30,000 jobs are set to be shed by the core VW brand by 2025, albeit through early retirement and a reduction in part-time staff rather than compulsory redundancies.

On February 13, talks broke down between the parties. The main issues under discussion were overtime work, efficiency gains, apprenticeships, and accusations that management was trying to squeeze greater savings from the workforce than had been agreed.

Last week, unions accused chief executive of the VW brand, Herbert Diess, of seeking to cut temporary workers faster and more deeply than had been agreed in November. However, Volkswagen has now rowed back on these plans. The works council said on Tuesday that management had abandoned demands that a costly night shift be scrapped on the Golf hatchback's assembly line, performance-based pay rules be tightened and that a hiring freeze be cancelled.

On Monday, the works council said that discussions on the implementation of the ’future pact’ – designed to improve profit at VW’s main automotive divisions – were “constructive” particularly with regard to the “open questions regarding the future pact”.

Workers at VW’s main plant at its Wolfsburg headquarters, which employs 60,000 people, received more information at a staff gathering this Tuesday.

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